July 09, 2008 | 12 Comments
Private investors have completed the US $10.75 million equity financing for Honolulu Seawater Air Conditioning, the innovative renewable energy project for downtown Honolulu. The company anticipates a construction start date of January 5, 2009.
"We are excited to have the private equity in place, enabling us to proceed with the Environmental Impact Statement (EIS), detail engineering plans and project development," announced William (Bill) Mahlum, President and CEO of Honolulu Seawater Air Conditioning, LLC (HSWAC). "This will be a very busy year as we prepare for construction and complete our marketing efforts."
The equity financing for the US $152 million project has been provided by private investors in the U.S. and Sweden, with more than half of the cash coming from Honolulu investors.
"The significant commitment from local investors demonstrates their excitement and confidence in this new community asset," said Mahlum. "Seawater air conditioning will protect businesses from the skyrocketing electric rates caused by oil price increases and everybody will benefit from a cleaner environment," he said. Mahlum added that most of the remaining project costs would be covered by approximately US $140 million in construction financing.
"As Hawaii grapples with the dual threats of US $100-a-barrel oil and global climate change, the time is absolutely right for the development of this zero-emissions air conditioning system," said Mahlum. "Reducing our use of fossil fuels and preserving the environment will be a wonderful legacy that we all leave to future generations of Hawaii residents."
Conventional air conditioning is a heavy consumer of energy in Honolulu, which relies on imported oil and other fossil fuels for a staggering 90% of its electricity. HSWAC will reduce Hawaii's dependence on imported oil used to generate electricity. It will dramatically reduce operating costs for downtown building owners, with the savings increasing as oil prices climb. With oil at US $80-a-barrel, the savings in overall operating costs are projected to be 16.1%, but those savings climb to 21.7% with US $100-a-barrel oil prices. In addition, HSWAC customers will no longer need to worry about periodic capital expenditures to repair or replace expensive on-site cooling equipment.
Downtown building owners have, of course, responded enthusiastically to the prospect of lower operating costs and stable rates for 25 years. The HSWAC system already has made commitments to future customers totaling more than 50% of the system's 25,000-ton capacity. Among those signing letters of intent are the Prince Kuhio Federal Building and Hawaiian Electric Company (HECO), which sent letters to its customers encouraging them "to carefully consider utilizing deep-water cooling for your building's air conditioning requirements." The utility pledged to sign up for the new service at its headquarters and to turn off its own electric-powered cooling system.
How It Works
Seawater will be drawn from a depth of approximately 1,600 feet at a temperature of about 45 DF. It will be pumped to a cooling station onshore, where heat exchangers enable it to cool fresh water that circulates in a closed loop to customer buildings. After passing through the heat exchangers, the warmed seawater will be returned to the ocean at a shallower depth, using a diffuser that ensures proper mixing and dilution.
Deep water cooling is a proven technology in Canada and the U.S. In Ithaca, N.Y., Cornell University uses water from Cayuga Lake to cool its campus. Toronto's system uses deep water from Lake Ontario to cool its downtown buildings. The technology has tremendous potential for other urban areas located adjacent to large bodies of cold water.
Honolulu Seawater Air Conditioning will be managed under a long-term management contract by Renewable Energy Innovations, LLC, an affiliate of America's most widely-recognized district heating and cooling system located in Saint Paul, Minnesota. That company's President, Anders Rydaker, and HSWAC Vice President of Engineering, Ingvar Larsson, pioneered seawater air conditioning in their native Sweden and are now bringing this technology to Honolulu.
The Honolulu Seawater Air Conditioning project has received encouragement from the Governor's Office, the Hawaii State Legislature, Hawaii's Congressional delegation and numerous business, environmental, labor and civic organizations.
Peter Myers is an independent media consultant and video producer based in Minneapolis/St. Paul.
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